The cryptocurrency has gripped the attention of Main Street and Wall Street as it has zipped to incredible heights, soaring over $US11,000 a coin on Wednesday.

Icahn falls among the many Wall Streeters who think the cryptocurrency is in a bubble. The billionaire, who admits to not know much about the technology of bitcoin, told CNBC it reminded him of an obscure bubble involving swampland in Mississippi.

“Where John Law went around selling all this land in Mississippi that was sort of worthless and the French were going crazy giving him all this money, and then one night it all blew up,” Icahn said.

What was the Mississippi Bubble?

The Mississippi Bubble was brought on by John Law, a Scottish adventurer and economist, in the early 1700s. Law was granted the authority by the French government to open up a company to oversee the French’s territorial claims hugging the Mississippi River in the present day US. In order to fund the venture he issued paper shares to investors.

As such, the value of the company’s shares spiked as investors, enchanted by the idea of far-flung lands and riches, poured in. Here’s Moen (emphasis ours):

“The financial district in Paris became so agitated at times with investors that soldiers would be sent in at night to maintain order. Shares in the Mississippi Company started at around 500 livres tournois (the French unit of account at the time) per share in January 1719. By December 1719, share prices had reached 10,000 livres, an increase of 1900 per cent in just under a year.”

By way of comparison, bitcoin is up more than 860% year-to-date. That tear has been triggered by new found interest from regulator investors looking to jump on the bandwagon. Coinbase, the largest platform to buy and sell cryptocurrencies in the US, added 100,000 users from Wednesday to Thursday the week of Thanksgiving.

During the Mississippi Bubble, even peasants were scrapping together whatever they could to get in on the scorching-hot venture. Many millionaires were created, according to Moen. But once people realised much of the lands were worthless swamps, things turned south.

“In the end, many of the new millionaires were financially destroyed. So was France,” Moen wrote. “It would be eighty years before France would again introduce paper money into its economy.”

UBS warned clients in October that it doesn’t think bitcoin’s price is supported by fundamentals.

“We think the sharp rise in crypto-currency valuations in recent months is a speculative bubble,” the bank wrote.